-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KaGwcRHb1tot6Xc4hlnVOztESq0vqfrA1rSeJCHqcEbQ+IzeGYJuCEOg8oUgsaWK enpOxOBC6xomMfcGoSt58w== 0000935069-02-000988.txt : 20020830 0000935069-02-000988.hdr.sgml : 20020830 20020830144527 ACCESSION NUMBER: 0000935069-02-000988 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020630 FILED AS OF DATE: 20020830 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OPPENHEIMER VARIABLE ACCOUNT FUNDS CENTRAL INDEX KEY: 0000752737 IRS NUMBER: 840974272 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-04108 FILM NUMBER: 02754134 BUSINESS ADDRESS: STREET 1: 3410 S GALENA ST CITY: DENVER STATE: CO ZIP: 80231 BUSINESS PHONE: 3036713200 MAIL ADDRESS: STREET 2: 3410 S GALENA ST CITY: DENVER STATE: CO ZIP: 80231 FORMER COMPANY: FORMER CONFORMED NAME: OPPENHEIMER VARIABLE LIFE FUNDS DATE OF NAME CHANGE: 19860609 N-30D 1 g5299_mainstsmcapgrwthva.txt SEMIANNUAL REPORT JUNE 30, 2002 Oppenheimer Main Street(REGISTRATION MARK) Small Cap Fund/VA A Series of Oppenheimer Variable Account Funds [LOGO OMITTED] OPPENHEIMERFUNDS[REGISTRATION MARK] The Right Way to Invest - -------------------------------------------------------------------------------- OPPENHEIMER MAIN STREET SMALL CAP FUND/VA - -------------------------------------------------------------------------------- ================================================================================ OBJECTIVE OPPENHEIMER MAIN STREET [REGISTRATION MARK] SMALL CAP FUND/VA, a series of Oppenheimer Variable Account Funds, seeks capital appreciation. In seeking its objective, the Fund emphasizes investments of securities in small cap companies, presently defined as those with market capitalizations of up to $2.5 billion. ================================================================================ NARRATIVE BY CHARLES ALBERS AND MARK ZAVANELLI, CO-PORTFOLIO MANAGERS For the six-month period ended June 30, 2002, Oppenheimer Main Street Small Cap Fund/VA's Non-Service shares provided a total return of 0.36%,(1) outperforming its benchmark, the Russell 2000 Small Cap Index and peer group average.(2) We attribute the Fund's strong performance to our disciplined investment approach, which combines seasoned professional judgment with sophisticated statistical models to identify industry groups and individual stocks that, in our view, are likely to lead the small-cap stock market. The ability of our approach to filter out near-term market "noise" from long-term trends was particularly helpful in recently volatile markets. This reporting period was marked by rapidly shifting investor sentiment as the markets were buffeted by economic and world events. While the U.S. economy began to recover in 2002, signaling an end to the Federal Reserve Board's (the Fed) rate cuts, corporate earnings generally remained under pressure. Meanwhile, well-publicized accounting scandals eroded investors' confidence in reported corporate financial statements and market uncertainty was intensified by the war on terrorism and escalating conflicts in the Middle East and South Asia. These pressures led to heightened month-to-month volatility for the small-cap market and the Fund. Nonetheless, small-cap stocks posted substantially higher returns than their mid- and large-cap counterparts during the six-month period. While small-cap stocks may offer greater opportunities for longer-term capital appreciation than larger, more established companies, they involve substantially greater risks of loss and price fluctuations. Our multi-factor quantitative models did a good job uncovering the long-term trends driving the small-cap stock market. Three particularly important factors were market capitalization, valuation and price momentum. MARKET CAPITALIZATION Throughout the period, our "top-down" models correctly suggested that micro- and small-cap stocks were likely to outperform larger stocks. As a result, compared to the Russell 2000 Index, we allocated a significantly higher percentage of the Fund's assets to micro-caps. This focus on smaller stocks benefited the Fund's performance. 1. Total returns include changes in net asset value per share but do not include the charges associated with the separate account products which offer this Fund. Such performance would have been lower if such charges were taken into account, and can be provided by the separate account product sponsor. 2. The Fund's performance is compared to the Russell 2000 Small Cap Index and the average of the total return of the 385 funds in the Lipper Small-Cap Core Fund/VA category for the six-month period ended 6/30/02. 2 OPPENHEIMER MAIN STREET SMALL CAP FUND/VA VALUATION Our security selection models recommended stocks with low prices relative to earnings, sales, cash flows and other valuation measures, and this Fund's tilt toward the value style of investing contributed positively to performance. By the end of the period, however, our models suggested a more balanced stance between value and growth stocks. PRICE MOMENTUM Finally, our models suggested that industry groups and stocks that had done well would probably continue to do well. This focus on stocks with positive price momentum contributed positively to performance. The small-cap market's gains were broad-based, with eight of the 10 industry groups that comprise the Russell 2000 Small Cap Index posting positive returns. Only health care and technology lost ground. In this environment, the Fund's emphasis on consumer discretionary stocks proved especially beneficial as this group posted the highest returns of any sector in the Index. We also emphasized the industrials and basic materials groups, while maintaining relatively light exposure to financials, information technology and utilities. Our stock selection strategy, another reason behind the Fund's strong relative performance, proved particularly advantageous in the energy sector, resulting in gains for the Fund in an area that produced losses for the Russell 2000 Small Cap Index. Stock selection also helped the Fund avoid the full brunt of the Index's losses in health care and information technology. Our top-down models continue to favor small-cap stocks over large-caps. In fact, during the first quarter of 2002, small companies participated strongly in the economic rebound, while the largest companies' earnings remained stagnant. In our opinion, many of the largest companies in the telecommunications, technology, pharmaceutical, brokerage and oil sectors are suffering from the hangover of the late-1990s boom. In contrast, many companies in the small-cap market enjoy strong business fundamentals and reasonable stock valuations. While there's never a guarantee of future performance, history suggests that the compounding effects of rising earnings and expanding valuations can be powerful. Harnessing the growth power of small-cap stocks is what makes Oppenheimer Main Street Small Cap Fund/VA an important part of THE RIGHT WAY TO INVEST. IN REVIEWING PERFORMANCE, PLEASE REMEMBER THAT PAST PERFORMANCE CANNOT GUARANTEE FUTURE RESULTS. BECAUSE OF ONGOING MARKET VOLATILITY, THE FUND'S PERFORMANCE MAY BE SUBJECT TO FLUCTUATIONS, AND CURRENT PERFORMANCE MAY BE LESS THAN THE RESULTS SHOWN. The Fund's portfolio is subject to change. The Fund's investment strategy and focus can change over time. The mention of specific fund holdings does not constitute a recommendation by OppenheimerFunds, Inc. SHARES OF OPPENHEIMER FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF ANY BANK, ARE NOT GUARANTEED BY ANY BANK, ARE NOT INSURED BY THE FDIC OR ANY OTHER AGENCY, AND INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED. 3 OPPENHEIMER MAIN STREET SMALL CAP FUND/VA - -------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS June 30, 2002 / Unaudited - -------------------------------------------------------------------------------- MARKET VALUE SHARES SEE NOTE 1 ================================================================================ COMMON STOCKS--93.7% - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- CONSUMER DISCRETIONARY--24.3% - -------------------------------------------------------------------------------- AUTO COMPONENTS--1.8% Aftermarket Technology Corp.(1) 2,100 $ 40,320 American Axle & Manufacturing Holdings, Inc.(1) 1,900 56,506 ArvinMeritor, Inc. 1,900 45,600 Autoliv, Inc. 600 15,120 Bandag, Inc. 100 2,832 Borg-Warner Automotive, Inc.(1) 800 46,208 Cooper Tire & Rubber Co. 1,600 32,880 Dana Corp. 1,200 22,236 Dura Automotive Systems, Inc.(1) 1,600 33,200 Keystone Automotive Industries, Inc.(1) 1,100 21,174 Lear Corp.(1) 700 32,375 Strattec Security Corp.(1) 400 22,128 Superior Industries International, Inc. 300 13,875 Tenneco Automotive, Inc.(1) 700 4,620 Tower Automotive, Inc.(1) 4,200 58,590 ------------ 447,664 - -------------------------------------------------------------------------------- AUTOMOBILES--0.4% Coachmen Industries, Inc. 400 5,800 Monaco Coach Corp.(1) 1,400 29,820 Thor Industries, Inc. 400 28,504 Winnebago Industries, Inc. 900 39,600 ------------ 103,724 - -------------------------------------------------------------------------------- DISTRIBUTORS--0.2% Advanced Marketing Services, Inc. 1,400 25,620 Cantel Medical Corp.(1) 600 11,040 MSC Industrial Direct Co., Inc., Cl. A(1) 1,300 25,350 ------------ 62,010 - -------------------------------------------------------------------------------- HOTELS, RESTAURANTS & LEISURE--4.2% AFC Enterprises, Inc.(1) 900 28,125 Alliance Gaming Corp.(1) 1,900 23,712 Ameristar Casinos, Inc.(1) 1,200 34,872 Applebee's International, Inc. 1,950 44,753 Argosy Gaming Co.(1) 600 17,040 Aztar Corp.(1) 2,400 49,920 Bob Evans Farms, Inc. 1,600 50,368 Boyd Gaming Corp.(1) 3,300 47,520 California Pizza Kitchen, Inc.(1) 300 7,440 CBRL Group, Inc. 200 6,104 Chicago Pizza & Brewery, Inc.(1) 600 5,988 Choice Hotels International, Inc.(1) 2,200 44,022 CKE Restaurants, Inc.(1) 1,800 20,484 Dave & Buster's, Inc.(1) 300 3,642 GTech Holdings Corp.(1) 1,800 45,972 Hollywood Casino Corp., Cl. A(1) 1,800 19,440 MARKET VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- IHOP Corp.(1) 900 $ 26,505 Isle of Capri Casinos, Inc.(1) 2,000 40,500 Landry's Restaurants, Inc. 2,100 53,571 Lone Star Steakhouse & Saloon, Inc. 2,400 56,616 Mandalay Resort Group(1) 1,500 41,355 Marcus Corp. (The) 900 14,985 O'Charley's, Inc.(1) 300 7,590 P.F. Chang's China Bistro, Inc.(1) 1,400 43,988 Panera Bread Co., Cl. A(1) 200 6,894 Papa John's International, Inc.(1) 1,400 46,746 Penn National Gaming, Inc.(1) 1,400 25,410 Pinnacle Entertainment, Inc.(1) 100 1,063 Rare Hospitality International, Inc.(1) 1,600 43,072 Ruby Tuesday, Inc. 1,800 34,920 Ryan's Family Steak Houses, Inc.(1) 3,300 43,593 Sonic Corp. 1,300 40,833 Station Casinos, Inc.(1) 900 16,065 Steak n Shake Co. (The)(1) 2,500 39,125 ------------ 1,032,233 - -------------------------------------------------------------------------------- HOUSEHOLD DURABLES--2.7% American Greetings Corp., Cl. A 4,100 68,306 Applica, Inc.(1) 1,100 13,640 Beazer Homes USA, Inc.(1) 400 32,000 Blyth, Inc. 1,000 31,220 Clayton Homes, Inc. 800 12,640 Department 56, Inc.(1) 1,600 26,048 Dominion Homes, Inc.(1) 500 10,115 Harman International Industries, Inc. 900 44,325 Helen of Troy Ltd.(1) 3,100 36,084 Hovnanian Enterprises, Inc., Cl. A(1) 1,300 46,644 KB Home 500 25,755 La-Z-Boy, Inc. 800 20,176 Lancaster Colony Corp. 400 14,264 Libbey, Inc. 500 17,050 M.D.C. Holdings, Inc. 690 35,880 M/I Schottenstein Homes, Inc. 400 15,072 Maytag Corp. 500 21,325 Meritage Corp.(1) 1,200 54,780 Movado Group, Inc. 400 10,060 Ryland Group, Inc. (The) 1,000 49,750 Skyline Corp. 400 13,200 Standard Pacific Corp. 600 21,048 Toll Brothers, Inc.(1) 300 8,790 Toro Co. (The) 900 51,156 ------------ 679,328 - -------------------------------------------------------------------------------- INTERNET & CATALOG RETAIL--0.5% Gaiam, Inc.(1) 600 8,784 Insight Enterprises, Inc.(1) 1,700 42,823 J. Jill Group, Inc.(1) 1,600 60,720 ------------ 112,327 4 OPPENHEIMER MAIN STREET SMALL CAP FUND/VA MARKET VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- LEISURE EQUIPMENT & PRODUCTS--1.6% Acclaim Entertainment, Inc.(1) 3,900 $ 13,767 Action Performance Cos., Inc.(1) 1,500 47,400 Arctic Cat, Inc. 700 12,172 Big 5 Sporting Goods Corp.(1) 1,800 25,722 Brunswick Corp. 1,700 47,600 MarineMax, Inc.(1) 600 7,770 Nautilus Group, Inc. (The)(1) 1,500 45,900 Polaris Industries, Inc. 700 45,500 Racing Champions Corp.(1) 2,100 38,787 Scientific Games Corp., Cl. A(1) 5,600 44,464 SCP Pool Corp.(1) 1,050 29,148 Sturm, Ruger & Co., Inc. 2,700 38,205 ------------ 396,435 - -------------------------------------------------------------------------------- MEDIA--2.1% Advo, Inc.(1) 100 3,807 AMC Entertainment, Inc.(1) 1,700 24,140 Belo Corp., Cl. A 900 20,349 Cumulus Media, Inc., Cl. A(1) 800 11,024 Getty Images, Inc.(1) 700 15,239 Harte-Hanks, Inc. 2,100 43,155 Hearst-Argyle Television, Inc.(1) 500 11,275 infoUSA, Inc.(1) 4,500 24,619 Interactive Data Corp.(1) 600 8,736 Journal Register Co.(1) 2,500 50,250 Lee Enterprises, Inc. 800 28,000 Lin TV Corp.1 1,600 43,264 Marvel Enterprises, Inc.(1) 3,400 18,632 McClatchy Co., Cl. A 700 44,975 Meredith Corp. 500 19,175 Regal Entertainment Group(1) 400 9,328 Saga Communications, Inc., Cl. A(1) 1,500 33,750 Scholastic Corp.(1) 400 15,160 Sinclair Broadcast Group, Inc., Cl. A(1) 3,200 46,205 Spanish Broadcasting System, Inc., Cl. A(1) 4,400 44,000 Thomas Nelson, Inc. 500 5,280 ------------ 520,363 - -------------------------------------------------------------------------------- MULTILINE RETAIL--1.0% Big Lots, Inc. 2,900 57,072 Dillard's, Inc., Cl. A 1,400 36,806 Fred's, Inc. 1,200 44,136 Saks, Inc.(1) 2,600 33,384 Shopko Stores, Inc.(1) 1,400 28,280 Stage Stores, Inc.(1) 900 31,266 Stein Mart, Inc.(1) 1,000 11,870 ------------ 242,814 - -------------------------------------------------------------------------------- SPECIALTY RETAIL--8.2% A.C. Moore Arts & Crafts, Inc.(1) 700 33,145 Aaron Rents, Inc. 1,000 23,950 MARKET VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- AnnTaylor Stores Corp.(1) 750 $ 19,043 Asbury Automotive Group, Inc.(1) 1,400 19,040 Borders Group, Inc.(1) 1,200 22,080 Buckle, Inc. (The)(1) 300 7,395 Building Materials Holding Corp.(1) 2,000 28,740 Burlington Coat Factory Warehouse Corp. 1,000 21,250 Cato Corp., Cl. A 1,500 33,450 Central Garden & Pet Co.(1) 2,400 42,072 Charming Shoppes, Inc.(1) 2,100 18,144 Chico's FAS, Inc.(1) 1,000 36,320 Christopher & Banks Corp.(1) 700 29,610 Circuit City Stores, Inc./CarMax Group(1) 600 12,990 Claire's Stores, Inc. 1,400 32,060 Cost Plus, Inc.(1) 800 24,367 CSK Auto Corp.(1) 1,600 22,304 Deb Shops, Inc. 1,700 57,424 Dress Barn, Inc. (The)(1) 2,100 32,487 Finish Line, Inc., Cl. A(1) 3,300 59,136 Friedman's, Inc., Cl. A 1,800 23,398 Galyan's Trading Co.(1) 900 20,547 GameStop Corp.(1) 700 14,693 Gart Sports Co.(1) 500 14,245 Genesco, Inc.(1) 100 2,435 Goody's Family Clothing, Inc.(1) 600 6,918 Group 1 Automotive, Inc.(1) 1,100 41,965 Guitar Center, Inc.(1) 1,000 18,550 Gymboree Corp.(1) 3,500 56,070 Hancock Fabrics, Inc. 3,000 55,740 Haverty Furniture Cos., Inc. 600 11,850 Hibbett Sporting Goods, Inc.(1) 900 22,860 Hollywood Entertainment Corp.(1) 900 18,612 Hot Topic, Inc.(1) 1,500 40,065 Hughes Supply, Inc. 1,400 62,860 Jo-Ann Stores, Inc., Cl. A(1) 1,100 32,120 Linens 'N Things, Inc.(1) 200 6,562 Lithia Motors, Inc., Cl. A(1) 800 21,536 Men's Wearhouse, Inc. (The)(1) 500 12,750 Michaels Stores, Inc.(1) 1,200 46,800 Movie Gallery, Inc.(1) 2,825 59,664 OfficeMax, Inc.(1) 3,100 18,259 Pacific Sunwear of California, Inc.(1) 300 6,651 Party City Corp.(1) 1,100 17,930 Pep Boys-Manny, Moe & Jack 2,800 47,180 PetsMart, Inc.(1) 2,400 38,496 Pier 1 Imports, Inc. 2,200 46,200 Regis Corp. 1,800 48,634 Rent-A-Center, Inc.(1) 500 29,005 Rex Stores Corp.(1) 2,200 30,382 Ross Stores, Inc. 1,300 52,975 Sharper Image Corp.(1) 200 4,030 5 OPPENHEIMER MAIN STREET SMALL CAP FUND/VA - -------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS Unaudited / Continued - -------------------------------------------------------------------------------- MARKET VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- SPECIALTY RETAIL Continued Shoe Carnival, Inc.(1) 1,700 $ 36,278 Sonic Automotive, Inc.(1) 1,600 41,200 Sports Authority, Inc. (The)(1) 3,400 38,624 TBC Corp.(1) 2,600 41,288 Too, Inc.(1) 1,700 52,360 Tractor Supply Co.(1) 800 56,792 Tuesday Morning Corp.(1) 2,700 50,112 United Auto Group, Inc.(1) 1,500 31,350 Urban Outfitters, Inc.(1) 1,300 45,136 West Marine, Inc.(1) 2,000 25,520 Wet Seal, Inc., Cl. A(1) 2,250 54,675 Whitehall Jewellers, Inc.(1) 1,700 35,275 Williams-Sonoma, Inc.(1) 800 24,528 ------------ 2,038,127 - -------------------------------------------------------------------------------- TEXTILES & APPAREL--1.6% Brown Shoe Co., Inc. 400 11,240 Cherokee, Inc.(1) 100 2,077 Fossil, Inc.(1) 2,550 52,428 Garan, Inc. 300 17,355 Gildan Activewear, Inc., Cl. A(1) 200 4,508 K-Swiss, Inc., Cl. A 2,400 62,352 Kellwood Co. 1,700 55,250 Kenneth Cole Productions, Inc., Cl. A(1) 1,200 34,020 OshKosh B'Gosh, Inc., Cl. A 800 34,792 Phillips-Van Heusen Corp. 200 3,120 Quaker Fabric Corp.(1) 3,900 60,446 Quicksilver, Inc.(1) 1,500 37,200 Russell Corp. 200 3,850 Steven Madden Ltd.(1) 100 1,983 Stride Rite Corp. 1,700 13,600 Unifi, Inc.(1) 900 9,810 Wellman, Inc. 300 5,025 ------------ 409,056 - -------------------------------------------------------------------------------- CONSUMER STAPLES--4.0% - -------------------------------------------------------------------------------- BEVERAGES--0.3% Adolph Coors Co., Cl. B 300 18,690 Boston Beer Co., Inc., Cl. A(1) 1,100 17,490 Cott Corp.(1) 2,000 37,980 ------------ 74,160 - -------------------------------------------------------------------------------- FOOD & DRUG RETAILING--0.2% Nash Finch Co. 1,600 51,136 - -------------------------------------------------------------------------------- FOOD PRODUCTS--1.8% American Italian Pasta Co.(1) 500 25,495 Chiquita Brands International, Inc.(1) 400 7,164 Del Monte Foods Co.(1) 700 8,260 Dole Food Co., Inc. 1,500 43,275 Fresh Del Monte Produce, Inc. 2,900 72,500 MARKET VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- Horizon Organic Holding Corp.(1) 400 $ 7,048 Interstate Bakeries Corp. 1,200 34,656 J & J Snack Foods Corp.(1) 1,000 44,960 Jarden Corp.(1) 500 9,900 Lance, Inc. 2,500 36,450 Martek Biosciences Corp.(1) 1,800 37,656 Monterey Pasta Co.(1) 300 2,829 Peet's Coffee & Tea, Inc.(1) 2,100 38,661 Ralcorp Holdings, Inc.(1) 1,600 50,000 Sensient Technologies Corp. 1,000 22,760 Smucker Co., J.M. (The) 283 9,659 ------------ 451,273 - -------------------------------------------------------------------------------- HOUSEHOLD PRODUCTS--1.0% Chattem, Inc.(1) 1,600 50,400 Church & Dwight Co., Inc. 900 28,197 Dial Corp. (The) 3,100 62,062 Nu Skin Asia Pacific, Inc., Cl. A 1,900 27,645 Playtex Products, Inc.(1) 3,800 49,210 WD-40 Co. 1,400 38,864 ------------ 256,378 - -------------------------------------------------------------------------------- PERSONAL PRODUCTS--0.4% Del Laboratories, Inc. 300 7,500 Oakley, Inc.(1) 1,500 26,100 Yankee Candle, Inc. (The)(1) 1,900 51,471 ------------ 85,071 - -------------------------------------------------------------------------------- TOBACCO--0.3% DIMON, Inc. 800 5,536 Schweitzer-Mauduit International, Inc. 1,300 31,980 Standard Commercial Corp. 1,500 32,550 ------------ 70,066 - -------------------------------------------------------------------------------- ENERGY--2.9% - -------------------------------------------------------------------------------- ENERGY EQUIPMENT & SERVICES--0.8% Ensign Resource Service Group, Inc. 2,900 31,481 Grey Wolf, Inc.(1) 1,900 7,771 Helmerich & Payne, Inc. 1,300 46,436 Maverick Tube Corp.(1) 100 1,500 Oceaneering International, Inc.(1) 600 16,200 Oil States International, Inc.(1) 200 2,380 Superior Energy Services, Inc.(1) 200 2,030 Tesco Corp.(1) 400 4,431 Trican Well Service Ltd.(1) 4,100 48,524 W-H Energy Services, Inc.(1) 300 6,648 Willbros Group, Inc.(1) 1,900 32,300 ------------ 199,701 - -------------------------------------------------------------------------------- OIL & GAS--2.1% Baytex Energy Ltd.(1) 5,200 24,617 Brown (Tom), Inc.(1) 1,300 36,855 6 OPPENHEIMER MAIN STREET SMALL CAP FUND/VA MARKET VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- OIL & GAS Continued Callon Petroleum Co.(1) 2,100 $ 10,248 Canadian 88 Energy Corp.(2) 10,600 19,027 Canadian 88 Energy Corp. 9,700 17,411 Chesapeake Energy Corp.(1) 5,000 36,000 Compton Petroleum Corp.(1) 15,000 38,957 Denbury Resources, Inc.(1) 300 3,087 Frontier Oil Corp. 800 14,080 Holly Corp. 600 10,050 Meota Resources Corp.(1) 13,200 36,452 Newfield Exploration Co.(1) 1,000 37,170 Patina Oil & Gas Corp. 1,125 30,859 Pennzoil-Quaker State Co. 700 15,071 Peyto Exploration & Development Corp.(1) 9,000 40,831 Premcor, Inc.(1) 1,800 46,296 Purcell Energy Ltd.(1) 15,300 26,659 Quicksilver Resources, Inc.(1) 2,000 51,700 Range Resources Corp.(1) 400 2,240 Remington Oil & Gas Corp.(1) 100 1,992 Rio Alto Exploration Ltd.(1) 700 8,515 Upton Resources, Inc.(1) 3,600 8,521 Western Gas Resources, Inc. 100 3,740 ------------ 520,378 - -------------------------------------------------------------------------------- FINANCIALS--16.3% - -------------------------------------------------------------------------------- BANKS--11.4% 1st Source Corp. 1,500 37,080 Allegiant Bancorp, Inc. 400 7,268 American Financial Holdings, Inc. 500 14,960 Anchor BanCorp Wisconsin, Inc. 400 9,644 Arrow Financial Corp. 420 14,276 Astoria Financial Corp. 600 19,230 BancFirst Corp. 300 13,917 Bank Mutual Corp. 100 2,037 BankAtlantic Bancorp, Inc. 3,000 37,200 BankUnited Financial Corp., Cl. A(1) 2,000 38,300 Banner Corp. 300 7,425 Berkshire Hills Bancorp, Inc. 300 7,860 Brookline Bancorp, Inc. 700 17,710 BSB Bancorp, Inc. 300 8,004 Capitol Federal Financial 200 5,216 Cascade Bancorp 100 1,800 CB Bancshares, Inc. 350 13,261 CFS Bancorp, Inc. 1,000 15,460 Citizens Banking Corp. 700 20,286 Citizens First Bancorp, Inc. 100 2,249 Coastal Bancorp, Inc. 400 12,704 Commerce Bancshares, Inc. 200 8,848 Commercial Federal Corp. 1,700 49,300 MARKET VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- Commonwealth Bancorp, Inc. 1,400 $ 41,538 Community Banks, Inc. 420 12,356 Community First Bankshares, Inc. 1,100 28,699 Connecticut Bancshares, Inc. 1,500 49,800 Cullen/Frost Bankers, Inc. 200 7,190 CVB Financial Corp. 1,075 24,413 Dime Community Bancshares, Inc. 2,175 49,351 Downey Financial Corp. 500 23,650 East West Bancorp, Inc. 1,000 34,520 F.N.B. Corp. 735 20,183 Fidelity Bankshares, Inc. 2,416 53,418 First BanCorp, Puerto Rico 600 22,620 First Charter Corp. 200 3,616 First Commonwealth Financial Corp. 500 6,745 First Community Bancshares, Inc. 700 23,562 First Essex Bancorp, Inc. 900 30,780 First Federal Capital Corp. 1,800 39,780 First Financial Bankshares, Inc. 200 8,368 First Financial Holdings, Inc. 1,700 55,658 First Indiana Corp. 475 10,341 First Midwest Bancorp, Inc. 1,250 34,725 First Niagara Financial Group, Inc. 1,300 36,088 First Place Financial Corp. 800 15,928 First Republic Bank(1) 400 11,000 First Sentinel Bancorp, Inc. 3,900 53,664 FirstFed America Bancorp, Inc. 300 7,140 Flagstar Bancorp, Inc. 2,475 57,173 Flushing Financial Corp. 1,150 23,564 Glacier Bancorp, Inc. 1,200 29,400 Granite State Bankshares, Inc. 200 6,562 Hanmi Financial Corp. 300 5,142 Harbor Florida Bancshares, Inc. 2,700 56,187 Hibernia Corp., Cl. A 2,700 53,433 Hudson River Bancorp, Inc. 800 21,592 Hudson United Bancorp 1,000 28,560 IBERIABANK Corp. 900 36,486 Independence Community Bank Corp. 2,100 60,333 Independent Bank Corp.-Massachusetts 1,800 41,202 Independent Bank Corp.-Michigan 1,390 43,868 International Bancshares Corp. 625 26,400 Investors Financial Services Corp. 400 13,416 Local Financial Corp.(1) 2,500 40,775 MAF Bancorp, Inc. 1,500 56,400 Main Street Banks, Inc. 500 10,340 MB Financial, Inc. 600 20,076 Medford Bancorp., Inc. 100 3,483 Midwest Banc Holdings, Inc. 800 23,912 Mississippi Valley Bancshares, Inc. 800 41,384 NBT Bancorp, Inc. 600 10,842 Net.B@nk, Inc.(1) 125 1,456 OceanFirst Financial Corp. 1,000 24,140 7 OPPENHEIMER MAIN STREET SMALL CAP FUND/VA - -------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS Unaudited / Continued - -------------------------------------------------------------------------------- MARKET VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- BANKS Continued Old Second Bancorp, Inc. 933 $ 34,278 Oriental Financial Group, Inc. 330 8,369 Pacific Capital Bancorp 1,033 24,668 Pacific Northwest Bancorp 2,500 78,300 PennFed Financial Services, Inc. 400 11,160 PFF Bancorp, Inc. 1,100 42,240 Port Financial Corp. 1,000 40,090 Prosperity Bancshares, Inc. 4,000 72,876 Provident Bankshares Corp. 400 9,476 Quaker City Bancorp, Inc.(1) 400 16,568 R & G Financial Corp., Cl. B 1,800 42,678 Republic Bancorp, Inc. 210 3,137 Republic Bancorp, Inc., Cl. A 1,100 12,969 Roslyn Bancorp, Inc. 1,750 38,203 S&T Bancorp, Inc. 1,300 35,100 Sandy Spring Bancorp, Inc. 1,500 48,225 Seacoast Banking Corp. of Florida 600 34,638 Seacoast Financial Services Corp. 2,300 57,661 Second Bancorp, Inc. 700 19,110 South Financial Group, Inc. (The) 1,900 42,577 St. Francis Capital Corp. 600 14,874 State Bancorp, Inc. 855 15,005 Staten Island Bancorp, Inc. 1,200 23,040 Texas Regional Bancshares, Inc., Cl. A 200 9,922 Troy Financial Corp. 1,995 60,050 UCBH Holdings, Inc. 400 15,204 UMB Financial Corp. 300 14,061 Umpqua Holdings Corp. 100 1,848 Unizan Financial Corp. 765 16,379 Washington Federal, Inc. 300 7,578 Waypoint Financial Corp. 2,600 50,830 Webster Financial Corp. 1,200 45,888 WesBanco, Inc. 100 2,371 Westamerica Bancorp 200 7,912 Westcorp 1,100 35,145 Whitney Holding Corp. 400 12,296 Willow Grove Bancorp, Inc. 400 4,692 WSFS Financial Corp. 1,000 25,870 ------------ 2,840,582 - -------------------------------------------------------------------------------- DIVERSIFIED FINANCIALS--1.7% Affiliated Managers Group, Inc.(1) 400 24,600 American Home Mortgage Holdings, Inc. 900 11,241 Cash America International, Inc. 3,200 29,440 Credit Acceptance Corp.(1) 3,100 38,967 Financial Federal Corp.(1) 900 29,790 Friedman, Billings, Ramsey Group, Inc.(1) 4,100 52,193 Gabelli Asset Management, Inc.(1) 500 18,250 iDine Rewards Network, Inc.(1) 1,400 16,100 Interpool, Inc. 1,200 20,712 MARKET VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- ITLA Capital Corp.(1) 600 $ 17,814 Jefferies Group, Inc. 1,100 46,310 Ladenburg Thalmann Financial Services, Inc.(1) 144 43 New Century Financial Corp. 2,500 87,425 Student Loan Corp. (The) 300 24,852 Walter Industries, Inc. 800 10,680 World Acceptance Corp.(1) 300 2,520 ------------ 430,937 - -------------------------------------------------------------------------------- INSURANCE--2.6% Alfa Corp. 2,200 25,740 Berkley (W.R.) Corp. 300 16,500 Brown & Brown, Inc. 1,200 37,800 CCC Information Services Group, Inc.(1) 600 8,400 Commerce Group, Inc. (The) 800 31,640 CorVel Corp.(1) 1,300 43,546 Delphi Financial Group, Inc., Cl. A 400 17,340 Fidelity National Financial, Inc. 660 20,856 Hilb, Rogal & Hamilton Co. 1,200 54,300 Horace Mann Educators Corp. 1,600 29,872 IPC Holdings Ltd. 500 15,270 Midland Co. (The) 200 10,094 Ohio Casualty Corp.(1) 3,000 62,700 Philadelphia Consolidated Holding Co.(1) 1,000 45,340 Presidential Life Corp. 500 10,135 RenaissanceRe Holdings Ltd. 1,200 43,920 RLI Corp. 500 25,500 Selective Insurance Group, Inc. 500 14,165 StanCorp Financial Group, Inc. 600 33,300 Triad Guaranty, Inc.(1) 1,000 43,530 UICI(1) 2,300 46,460 Zenith National Insurance Corp. 600 19,110 ------------ 655,518 - -------------------------------------------------------------------------------- REAL ESTATE--0.6% Anworth Mortgage Asset Corp. 700 9,793 Apex Mortgage Capital, Inc. 400 5,996 Correctional Properties Trust 200 4,400 Developers Diversified Realty Corp. 300 6,750 Impac Mortgage Holdings, Inc. 1,400 18,872 Jones Lang LaSalle, Inc.(1) 2,300 56,810 Novastar Financial, Inc. 200 7,150 RAIT Investment Trust 300 7,119 Ramco-Gershenson Properties Trust 400 8,060 Redwood Trust, Inc. 100 3,150 William Lyon Homes, Inc.(1) 300 7,815 ------------ 135,915 - -------------------------------------------------------------------------------- HEALTH CARE--11.0% - -------------------------------------------------------------------------------- BIOTECHNOLOGY--1.9% Adolor Corp.(1) 800 9,008 8 OPPENHEIMER MAIN STREET SMALL CAP FUND/VA MARKET VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- BIOTECHNOLOGY Continued Amylin Pharmaceuticals, Inc.(1) 500 $ 5,470 Ariad Pharmaceuticals, Inc.(1) 200 832 Array BioPharma, Inc.(1) 1,700 16,388 AVI BioPharma, Inc.(1) 400 1,176 Charles River Laboratories International, Inc.(1) 1,800 63,090 Ciphergen Biosystems, Inc.(1) 700 2,471 deCODE genetics, Inc.(1) 1,100 5,148 Discovery Partners International, Inc.(1) 400 2,624 Embrex, Inc.(1) 700 14,644 Gene Logic, Inc.(1) 500 7,000 Genta, Inc.(1) 4,200 34,818 Idexx Laboratories, Inc.(1) 800 20,632 InterMune, Inc.(1) 1,000 21,100 Ligand Pharmaceuticals, Inc., Cl. B(1) 2,400 34,800 Medicines Co. (The)(1) 1,600 19,728 Nuerocrine Biosciences, Inc.(1) 800 22,920 OSI Pharmaceuticals, Inc.(1) 400 9,608 SangStat Medical Corp.(1) 1,600 36,768 Sicor, Inc.(1) 200 3,708 Telik, Inc.(1) 3,700 46,250 Transkaryotic Therapies, Inc.(1) 1,000 36,050 Trimeris, Inc.(1) 1,000 44,390 V.I. Technologies, Inc.(1) 2,400 8,760 XOMA Ltd.(1) 3,500 13,965 ------------ 481,348 - -------------------------------------------------------------------------------- HEALTH CARE EQUIPMENT & SUPPLIES--4.3% Alaris Medical, Inc.(1) 2,100 13,986 American Medical Systems Holdings, Inc.(1) 2,500 50,150 Arrow International, Inc. 400 15,620 Bio-Rad Laboratories, Inc., Cl. A(1) 1,200 54,612 Biosite, Inc.(1) 1,300 36,595 Bruker AXS, Inc.(1) 1,600 2,400 Cerus Corp.(1) 500 16,940 Cholestech Corp.(1) 400 4,220 Conceptus, Inc.(1) 500 8,245 ConMed Corp.(1) 1,700 37,961 Cooper Cos., Inc. (The) 200 9,420 Diagnostic Products Corp. 1,200 44,400 Fischer Imaging Corp.(1) 1,800 15,309 HealthTronics Surgical Services, Inc.(1) 600 10,494 Hologic, Inc.(1) 3,800 54,986 ICU Medical, Inc.(1) 700 21,630 Igen, Inc.(1) 700 22,050 Immucor, Inc.(1) 2,000 46,940 Inamed Corp.(1) 1,500 40,080 Integra LifeSciences Holdings Corp.(1) 200 4,350 K-V Pharmaceutical Co., Cl. A(1) 400 10,800 MARKET VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- Kyphon, Inc.(1) 1,200 $ 17,496 Lifeline Systems, Inc.(1) 300 7,902 Mentor Corp. 1,200 44,051 Meridian Medical Technologies, Inc.(1) 1,000 36,100 Merit Medical Systems, Inc.(1) 2,725 56,217 Noven Pharmaceuticals, Inc.(1) 2,200 56,100 Ocular Sciences, Inc.(1) 1,600 42,400 OrthoLogic Corp.(1) 2,400 13,272 Penwest Pharmaceuticals Co.(1) 1,200 23,400 Possis Medical, Inc.(1) 2,100 25,933 Quidel Corp.(1) 3,300 22,737 Radiologix, Inc.(1) 2,300 35,075 Respironics, Inc.(1) 100 3,405 Rita Medical Systems, Inc.(1) 400 4,048 Steris Corp.(1) 2,200 42,042 Viasys Healthcare, Inc.(1) 400 6,980 Vital Signs, Inc. 700 25,305 West Pharmaceutical Services, Inc. 600 19,254 Young Innovations, Inc.(1) 2,250 48,870 Zoll Medical Corp.(1) 200 6,506 ------------ 1,058,281 - -------------------------------------------------------------------------------- HEALTH CARE PROVIDERS & SERVICES--4.4% aaiPharma, Inc.(1) 1,700 38,216 Accredo Health, Inc.(1) 827 38,158 Alliance Imaging, Inc.(1) 800 10,800 American Medical Security Group, Inc.(1) 800 19,160 AmSurg Corp.(1) 2,300 60,398 BioReliance Corp.(1) 800 19,840 Caremark Rx, Inc.(1) 2,000 33,000 Cole National Corp.(1) 1,900 36,100 Covance, Inc.(1) 2,000 37,500 Coventry Health Care, Inc.(1) 1,100 31,262 D&K Healthcare Resources, Inc. 1,300 45,838 DaVita, Inc.(1) 1,800 42,840 Dianon Systems, Inc.(1) 800 42,736 Dynacare, Inc.(1) 3,100 68,169 Hanger Orthopedic Group, Inc.(1) 1,600 24,304 Hooper Holmes, Inc. 1,000 8,000 Humana, Inc.(1) 500 7,815 LabOne, Inc.(1) 1,100 28,589 LifePoint Hospitals, Inc.(1) 1,100 39,941 Mid Atlantic Medical Services, Inc.(1) 2,000 62,700 Owens & Minor, Inc. 600 11,856 Oxford Health Plans, Inc.(1) 900 41,814 Pediatrix Medical Group, Inc.(1) 1,200 30,000 Prime Medical Services, Inc.(1) 1,000 11,620 PSS World Medical, Inc.(1) 4,800 38,880 Schein (Henry), Inc.(1) 600 26,700 Sierra Health Services, Inc.(1) 4,200 93,870 Tripos, Inc.(1) 1,500 32,700 9 OPPENHEIMER MAIN STREET SMALL CAP FUND/VA STATEMENT OF INVESTMENTS Unaudited / Continued MARKET VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- HEALTH CARE PROVIDERS & SERVICES Continued U.S. Physical Therapy, Inc.(1) 2,400 $ 48,744 United Surgical Partners International, Inc.(1) 800 24,784 US Oncology, Inc.(1) 200 1,666 VitalWorks, Inc.(1) 5,200 42,640 ------------ 1,100,640 - -------------------------------------------------------------------------------- PHARMACEUTICALS--0.4% Bradley Pharmaceuticals, Inc.(1) 400 5,320 Connetics Corp.(1) 700 9,043 First Horizon Pharmaceutical Corp.(1) 200 4,138 Impax Laboratories, Inc.(1) 2,500 18,725 Indevus Pharmaceuticals, Inc.(1) 2,000 2,320 Isis Pharmaceuticals, Inc.(1) 3,200 30,432 Perrigo Co.(1) 2,200 28,600 Vivus, Inc.(1) 900 6,093 ------------ 104,671 - -------------------------------------------------------------------------------- INDUSTRIALS--18.1% - -------------------------------------------------------------------------------- AEROSPACE & DEFENSE--1.2% Aviall, Inc.(1) 1,900 26,600 Cubic Corp. 600 14,220 Curtiss-Wright Corp. 100 8,000 Ducommun, Inc.(1) 700 18,368 Dynamics Research Corp.(1) 1,100 26,598 Herley Industries, Inc.(1) 1,600 33,936 Integrated Defense Technologies, Inc.(1) 100 2,943 Kroll, Inc.(1) 1,300 27,274 Ladish Co., Inc.(1) 1,100 13,420 Moog, Inc., Cl. A(1) 300 12,864 MTC Technologies, Inc.(1) 800 15,200 Orbital Sciences Corp.(1) 3,900 31,083 Veridian Corp.(1) 2,800 63,560 ------------ 294,066 - -------------------------------------------------------------------------------- AIR FREIGHT & COURIERS--0.2% Airborne, Inc. 2,200 42,240 - -------------------------------------------------------------------------------- BUILDING PRODUCTS--1.6% Aaon, Inc.(1) 1,150 21,585 American Woodmark Corp. 700 39,291 Apogee Enterprises, Inc. 1,200 17,232 Elcor Corp. 1,700 46,495 Foamex International, Inc.(1) 1,761 19,565 Griffon Corp. 3,170 57,377 Intermet Corp. 1,400 15,036 Lennox International, Inc. 2,800 50,372 LSI Industries, Inc. 500 9,185 NCI Building Systems, Inc.(1) 400 7,120 Simpson Manufacturing Co., Inc.(1) 100 5,713 Trex Co., Inc.(1) 1,700 53,380 Universal Forest Products, Inc. 1,800 42,156 Watsco, Inc. 1,200 21,900 ------------ 406,407 MARKET VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- COMMERCIAL SERVICES & SUPPLIES--7.7% AMN Healthcare Services, Inc.(1) 300 $ 10,503 Arbitron, Inc.(1) 1,600 49,920 Banta Corp. 1,100 39,490 Bowne & Co., Inc. 3,300 48,642 Bright Horizons Family Solutions, Inc.(1) 1,300 43,043 Career Education Corp.(1) 500 22,500 CDI Corp.(1) 300 9,765 Central Parking Corp. 1,400 31,990 Certegy, Inc.(1) 500 18,555 Clean Harbors, Inc.(1) 100 1,176 Coinstar, Inc.(1) 1,400 34,230 Consolidated Graphics, Inc.(1) 800 15,200 Corinthian Colleges, Inc.(1) 1,800 61,002 CSS Industries, Inc.(1) 200 7,100 Ennis Business Forms, Inc. 800 10,440 FactSet Research Systems, Inc. 900 26,793 FTI Consulting, Inc.(1) 1,700 59,517 G & K Services, Inc., Cl. A 1,400 47,936 General Binding Corp.(1) 700 11,711 Gentiva Health Services, Inc. 1,700 15,283 Global Imaging Systems, Inc.(1) 2,300 43,677 Global Payments, Inc. 1,500 44,625 Harland (John H.) Co. 1,500 42,300 Headwaters, Inc.(1) 2,900 45,675 ICT Group, Inc.(1) 2,000 36,340 Imagistics International, Inc.(1) 2,800 60,116 Information Resources, Inc.(1) 1,700 15,961 Innodata Corp.(1) 4,800 6,384 ITT Educational Services, Inc.(1) 2,300 50,140 Kelly Services, Inc., Cl. A 800 21,608 Kimball International, Inc., Cl. B 900 14,751 Labor Ready, Inc.(1) 5,400 31,590 Landauer, Inc. 800 31,064 MemberWorks, Inc.(1) 800 14,824 Moore Corp. Ltd.(1) 3,100 35,588 MPS Group, Inc.(1) 6,100 51,850 Navigant International, Inc.(1) 1,300 20,111 New England Business Service, Inc. 600 15,084 PayPal, Inc.(1) 400 8,081 Pegasus Solutions, Inc.(1) 2,900 50,750 Pegasystems, Inc.(1) 3,200 28,861 Per-Se Technologies, Inc.(1) 4,000 36,796 Pittston Brink's Group 2,500 60,000 PRG-Schultz International, Inc.(1) 2,200 27,082 ProQuest Co.(1) 1,400 49,700 Renaissance Learning, Inc.(1) 800 16,176 Right Management Consultants, Inc. 1,950 51,283 RMH Teleservices, Inc.(1) 1,800 12,366 Schawk, Inc. 1,000 10,700 Spherion Corp.(1) 1,700 20,230 10 OPPENHEIMER MAIN STREET SMALL CAP FUND/VA MARKET VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- COMMERCIAL SERVICES & SUPPLIES Continued Stamps.com, Inc.(1) 3,500 $ 15,505 Standard Register Co. (The) 1,700 58,123 Stericycle, Inc.(1) 800 28,328 Strayer Education, Inc. 600 38,160 Sylvan Learning Systems, Inc.(1) 800 15,952 Tyler Technologies, Inc.(1) 3,700 19,684 UniFirst Corp. 2,100 53,130 United Stationers, Inc.(1) 100 3,040 University of Phoenix Online(1) 600 17,772 Valassis Communications, Inc.(1) 300 10,950 Viad Corp. 900 23,400 Wackenhut Corrections Corp.(1) 1,500 21,900 Wallace Computer Services, Inc. 2,100 45,150 Waste Connections, Inc.(1) 400 12,496 World Fuel Services Corp. 1,600 39,040 ------------ 1,921,139 - -------------------------------------------------------------------------------- CONSTRUCTION & ENGINEERING--0.5% Butler Manufacturing Co. 100 2,745 Comfort Systems USA, Inc.(1) 3,000 14,910 EMCOR Group, Inc.(1) 800 46,960 McDermott International, Inc.(1) 2,000 16,200 URS Corp.(1) 1,100 30,800 WCI Communities, Inc.(1) 300 8,685 ------------ 120,300 - -------------------------------------------------------------------------------- ELECTRICAL EQUIPMENT--1.3% Acuity Brands, Inc. 500 9,100 Advanced Energy Industries, Inc.(1) 400 8,872 AMETEK, Inc. 900 33,525 Baldor Electric Co. 1,000 25,200 Energizer Holdings, Inc.(1) 2,300 63,066 Franklin Electric Co., Inc. 700 32,949 Genlyte Group, Inc. (The)(1) 1,000 40,630 Littlefuse, Inc.(1) 100 2,313 Paxar Corp.(1) 3,000 50,250 Smith (A.O.) Corp. 1,600 49,936 ------------ 315,841 - -------------------------------------------------------------------------------- INDUSTRIAL CONGLOMERATES--0.3% Carlisle Cos., Inc. 100 4,498 Lydall, Inc.(1) 700 10,675 Tredegar Corp. 1,500 36,225 United Industrial Corp. 700 15,295 ------------ 66,693 - -------------------------------------------------------------------------------- MACHINERY--3.6% Actuant Corp., Cl. A(1) 700 28,875 AGCO Corp.(1) 1,100 21,450 Astec Industries, Inc.(1) 300 4,827 Barnes Group, Inc. 900 20,610 MARKET VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- Chicago Bridge & Iron Co. NV 1,400 $ 39,466 CIRCOR International, Inc. 1,900 32,585 Cuno, Inc.(1) 1,300 47,034 Donaldson Co., Inc. 1,100 38,544 Encore Wire Corp.(1) 2,700 38,421 Flowserve Corp.(1) 800 23,840 Gardner Denver, Inc.(1) 1,200 24,000 Graco, Inc. 1,650 41,481 GSI Lumonics, Inc.(1) 300 2,310 Harsco Corp. 1,500 56,250 Idex Corp. 500 16,750 Kaydon Corp. 600 14,166 Kennametal, Inc. 900 32,940 Lincoln Electric Holdings, Inc. 1,500 40,350 Lindsay Manufacturing Co. 100 2,315 Manitowoc Co., Inc. 1,200 42,588 Micro General Corp.(1) 900 15,021 Mueller Industries, Inc.(1) 200 6,350 NACCO Industries, Inc., Cl. A 200 11,620 Oshkosh Truck Corp. 400 23,644 Osmonics, Inc.(1) 1,400 22,260 Pentair, Inc. 800 38,464 Regal-Beloit Corp. 500 12,155 Reliance Steel & Aluminum Co. 400 12,200 Spartan Motors, Inc. 300 4,596 Terex Corp.(1) 1,700 38,233 Thomas Industries, Inc. 1,600 46,080 Timken Co. 1,200 26,796 Varian, Inc.(1) 1,300 42,835 Wabtec Corp. 900 12,825 Watts Industries, Inc., Cl. A 1,100 21,835 ------------ 903,716 - -------------------------------------------------------------------------------- MARINE--0.2% Gulfmark Offshore, Inc.(1) 900 37,269 Kirby Corp.(1) 900 22,005 Maritrans, Inc. 100 1,345 ------------ 60,619 - -------------------------------------------------------------------------------- ROAD & RAIL--1.5% CNF Transportation, Inc. 600 22,788 Covenant Transport, Inc., Cl. A(1) 500 10,625 Dollar Thrifty Automotive Group, Inc.(1) 1,700 44,030 Genesee & Wyoming, Inc., Cl. A(1) 1,700 38,352 Heartland Express, Inc. 1,119 26,778 Hunt (J.B.) Transport Services, Inc.(1) 1,400 41,328 Kansas City Southern1 800 13,600 Knight Transportation, Inc.(1) 325 7,537 Landstar System, Inc.(1) 300 32,055 Mullen Transportation, Inc. 1,300 27,352 P.A.M. Transportation Services, Inc.(1) 1,100 26,422 11 OPPENHEIMER MAIN STREET SMALL CAP FUND/VA - -------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS Unaudited / Continued - -------------------------------------------------------------------------------- MARKET VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- ROAD & RAIL Continued Ryder Systems, Inc. 1,800 $ 48,762 U.S. Xpress Enterprises, Inc., Cl. A(1) 100 1,311 Werner Enterprises, Inc. 933 19,882 ------------ 360,822 - -------------------------------------------------------------------------------- INFORMATION TECHNOLOGY--9.6% - -------------------------------------------------------------------------------- COMMUNICATIONS EQUIPMENT--0.5% Adaptec, Inc.(1) 3,600 28,404 Aspect Communications Corp.(1) 800 2,560 ClearOne Communications, Inc.(1) 800 11,784 Harris Corp. 500 18,120 Inter-Tel, Inc. 2,600 44,486 InterDigital Communications Corp.(1) 1,000 9,050 Powerwave Technologies, Inc.(1) 900 8,244 ------------ 122,648 - -------------------------------------------------------------------------------- COMPUTERS & PERIPHERALS--0.6% Cray, Inc.(1) 3,700 16,539 Iomega Corp.(1) 1,400 17,990 Pinnacle Systems, Inc.(1) 3,700 40,659 Rainbow Technologies, Inc.(1) 600 2,952 SimpleTech, Inc.(1) 6,200 21,142 Sonic Solutions, Inc.(1) 3,000 23,847 Storage Technology Corp.(1) 1,000 15,970 Western Digital Corp.(1) 6,000 19,500 ------------ 158,599 - -------------------------------------------------------------------------------- ELECTRONIC EQUIPMENT & INSTRUMENTS--1.8% Benchmark Electronics, Inc.(1) 1,800 52,200 Checkpoint Systems, Inc.(1) 2,700 31,590 Cognex Corp.(1) 400 8,020 Cohu, Inc. 700 12,096 CTS Corp. 400 4,816 DSP Group, Inc.(1) 200 3,920 EMS Technologies, Inc.(1) 3,000 62,070 Excel Technology, Inc.(1) 400 8,400 Hypercom Corp.(1) 500 3,850 Identix, Inc.(1) 537 3,920 InVision Technologies, Inc.(1) 400 9,664 Keithley Instruments, Inc. 1,100 15,884 MEMC Electronic Materials, Inc.(1) 500 2,450 Methode Electronics, Inc., Cl. A 4,100 52,357 MTS Systems Corp. 1,200 15,060 OmniVision Technologies, Inc.(1) 1,500 21,525 OSI Systems, Inc.(1) 2,100 41,643 Photon Dynamics, Inc.(1) 1,100 33,000 Rogers Corp.(1) 300 8,193 Sypris Solutions, Inc.(1) 1,000 18,220 Teledyne Technologies, Inc.(1) 1,900 39,425 ------------ 448,303 MARKET VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- INTERNET SOFTWARE & SERVICES--0.3% Digitas, Inc.(1) 1,700 $ 7,733 Fidelity National Information Solutions, Inc.(1) 600 14,400 iManage, Inc.(1) 700 2,520 Websense, Inc.(1) 1,900 48,583 ------------ 73,236 - -------------------------------------------------------------------------------- IT CONSULTING & SERVICES--1.5% Acxiom Corp.(1) 1,600 27,984 Anteon International Corp.(1) 600 15,168 Carreker Corp.(1) 3,700 42,550 Cognizant Technology Solutions Corp.(1) 800 43,000 Gartner, Inc., Cl. A(1) 2,900 29,290 Gartner, Inc., Cl. B(1) 100 940 IDX Systems Corp.(1) 300 3,906 J.D. Edwards & Co.(1) 4,700 57,105 Manhattan Associates, Inc.(1) 1,400 45,024 ManTech International Corp.(1) 800 19,192 Netsolve, Inc.(1) 1,400 10,066 PracticeWorks, Inc.(1) 1,100 20,295 SS&C Technologies, Inc.(1) 1,700 23,851 Startek, Inc.(1) 300 8,022 Syntel, Inc.(1) 2,100 25,956 ------------ 372,349 - -------------------------------------------------------------------------------- OFFICE ELECTRONICS--0.1% Ikon Office Solutions, Inc. 1,600 15,040 - -------------------------------------------------------------------------------- SEMICONDUCTOR EQUIPMENT & PRODUCTS--2.6% ATMI, Inc.(1) 500 11,185 Axcelis Technologies, Inc.(1) 1,800 20,340 ChipPAC, Inc.(1) 3,000 18,540 Cymer, Inc.(1) 1,200 42,048 Entegris, Inc.(1) 3,400 49,640 ESS Technology, Inc.(1) 2,700 47,358 FEI Co.(1) 800 19,608 FSI International, Inc.(1) 1,800 13,446 Genesis Microchip, Inc.(1) 28 234 Integrated Circuit Systems, Inc.(1) 700 14,133 LTX Corp.(1) 700 9,996 MKS Instruments, Inc.(1) 2,100 42,147 Monolithic System Technology, Inc.(1) 1,200 13,440 Power Integrations, Inc.(1) 3,000 53,697 Rambus, Inc.(1) 3,900 15,951 Silicon Image, Inc.(1) 2,600 15,912 Silicon Laboratories, Inc.(1) 1,700 46,002 Siliconix, Inc.(1) 1,400 38,780 Standard Microsystems Corp.(1) 2,000 47,220 Supertex, Inc.(1) 200 3,524 Transmeta Corp.(1) 2,700 6,345 Ultratech Stepper, Inc.(1) 1,900 30,761 12 OPPENHEIMER MAIN STREET SMALL CAP FUND/VA MARKET VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- SEMICONDUCTOR EQUIPMENT & PRODUCTS Continued Varian Semiconductor Equipment Associates, Inc.(1) 1,000 $ 33,930 Zoran Corp.(1) 2,850 65,293 ------------ 659,530 - -------------------------------------------------------------------------------- SOFTWARE--2.2% @Road, Inc.(1) 2,900 17,893 Activision, Inc.(1) 700 20,342 Ansoft Corp.(1) 3,600 21,168 Ansys, Inc.(1) 2,100 42,210 Catapult Communications Corp.(1) 2,500 54,678 Cerner Corp.(1) 500 23,915 Concord Communications, Inc.(1) 1,000 16,480 Dendrite International, Inc.(1) 900 8,703 Documentum, Inc.(1) 1,600 19,200 Fair, Isaac & Co., Inc. 300 9,861 Fargo Electronics, Inc.(1) 1,600 13,152 Gerber Scientific, Inc.(1) 700 2,457 HPL Technologies, Inc.(1) 500 7,530 Imation Corp.(1) 1,900 56,544 JDA Software Group, Inc.(1) 1,900 53,694 Kronos, Inc.(1) 650 19,818 MICROS Systems, Inc.(1) 400 11,084 Plumtree Software, Inc.(1) 800 3,984 Precis, Inc.(1) 300 2,715 Radiant Systems, Inc.(1) 3,800 49,514 Roxio, Inc.(1) 3,500 25,200 ScanSoft, Inc.(1) 3,700 27,380 Take-Two Interactive Software, Inc.(1,2) 1,400 28,826 ------------ 536,348 - -------------------------------------------------------------------------------- MATERIALS--6.4% - -------------------------------------------------------------------------------- CHEMICALS--3.0% AEP Industries, Inc.(1) 600 21,300 Airgas, Inc.(1) 3,100 53,630 Albemarle Corp. 1,700 52,275 Arch Chemicals, Inc. 900 22,230 ChemFirst, Inc. 1,100 31,515 Crompton Corp. 2,700 34,425 Ferro Corp. 500 15,075 Georgia Gulf Corp. 2,000 52,880 Great Lakes Chemical Corp. 1,300 34,437 H.B. Fuller Co. 100 2,929 IMC Global, Inc. 1,500 18,750 Mine Safety Applicances Co. 300 12,000 Octel Corp.(1) 2,600 65,910 Olin Corp. 2,500 55,375 Omnova Solutions, Inc.(1) 6,700 56,280 PolyOne Corp. 4,100 46,125 Quaker Chemical Corp. 400 9,800 MARKET VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- RPM, Inc. 2,500 $ 38,125 Schulman (A.), Inc. 3,000 64,347 Scotts Co. (The), Cl. A(1) 500 22,700 Valspar Corp. (The) 1,000 45,140 ------------ 755,248 - -------------------------------------------------------------------------------- CONSTRUCTION MATERIALS--0.4% AMCOL International Corp. 1,700 11,645 Ameron International Corp. 300 21,675 Centex Construction Products, Inc. 800 29,120 Florida Rock Industries, Inc. 800 28,648 Texas Industries, Inc. 300 9,447 ------------ 100,535 - -------------------------------------------------------------------------------- CONTAINERS & PACKAGING--1.3% Astronics Corp. 1,000 8,000 Ball Corp. 1,000 41,480 Bway Corp.(1) 500 7,975 Caraustar Industries, Inc. 1,300 16,224 Crown Cork & Seal Co., Inc.(1) 4,500 30,825 Graphic Packaging International Corp.(1) 1,700 15,725 Ivex Packaging Corp.(1) 2,800 63,756 Myers Industries, Inc. 1,300 22,282 Owens-Illinois, Inc.(1) 2,300 31,602 Pactiv Corp.(1) 400 9,520 Rock-Tenn Co., Cl. A 700 12,845 Silgan Holdings, Inc.(1) 1,500 60,660 ------------ 320,894 - -------------------------------------------------------------------------------- METALS & MINING--1.2% AK Steel Holding Corp.(1) 1,000 12,810 Commercial Metals Co. 600 28,164 Freeport-McMoRan Copper & Gold, Inc., Cl. B(1) 2,700 48,195 Goldcorp, Inc. 1,500 15,317 IMCO Recycling, Inc.(1) 1,400 13,790 Meridian Gold, Inc.(1) 1,400 22,736 NS Group, Inc.(1) 600 5,730 Oregon Steel Mills, Inc.(1) 2,200 13,200 Quanex Corp. 1,400 61,180 Royal Gold, Inc. 600 8,196 Steel Dynamics, Inc.(1) 1,400 23,058 Titanium Metals Corp.(1) 700 2,450 USEC, Inc. 200 1,760 Worthington Industries, Inc. 1,600 28,960 ------------ 285,546 - -------------------------------------------------------------------------------- PAPER & FOREST PRODUCTS--0.5% Deltic Timber Corp. 1,100 37,928 Glatfelter 2,800 52,640 Rayonier, Inc. 600 29,478 ------------ 120,046 13 OPPENHEIMER MAIN STREET SMALL CAP FUND/VA - -------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS Unaudited / Continued - -------------------------------------------------------------------------------- MARKET VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- TELECOMMUNICATION SERVICES--0.2% - -------------------------------------------------------------------------------- DIVERSIFIED TELECOMMUNICATION SERVICES--0.2% BroadWing, Inc.(1) 4,000 $ 10,400 Commonwealth Telephone Enterprises, Inc.(1) 1,000 40,240 General Communication, Inc., Cl. A(1) 100 667 North Pittsburgh Systems, Inc. 200 3,218 ------------ 54,525 - -------------------------------------------------------------------------------- UTILITIES--0.9% - -------------------------------------------------------------------------------- ELECTRIC UTILITIES--0.7% CH Energy Group, Inc. 700 34,475 Cleco Corp. 800 17,520 Navigo Energy, Inc.(1) 11,000 28,062 Paramount Resources Ltd.(1) 5,400 53,258 Vermilion Resources Ltd.(1) 6,400 43,553 WPS Resources Corp. 200 8,166 ------------ 185,034 - -------------------------------------------------------------------------------- GAS UTILITIES--0.2% Southwestern Energy Co.(1) 800 12,152 UGI Corp. 1,100 35,133 ------------ 47,285 ------------ Total Common Stocks (Cost $20,895,359) 23,307,145 ================================================================================ PREFERRED STOCKS--0.0% Astronics Corp., Cl. B (Cost $3,322) 250 2,000 PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 ================================================================================ REPURCHASE AGREEMENTS--2.3% Repurchase agreement with BNP Paribas Securities Corp., 1.89%, dated 6/28/02, to be repurchased at $561,088 on 7/1/02, collateralized by U.S. Treasury Bonds, 5.375%-10.375%, 11/15/12-2/15/31, with a value of $545,270 and U.S. Treasury Nts., 5.625%, 11/30/02, with a value of $29,227 (Cost $561,000) $561,000 $ 561,000 - -------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $21,459,681) 96.0% 23,870,145 - -------------------------------------------------------------------------------- OTHER ASSETS NET OF LIABILITIES 4.0 992,362 --------------------- NET ASSETS 100.0% $24,862,507 ===================== FOOTNOTES TO STATEMENT OF INVESTMENTS 1. Non-income producing security. 2. Identifies issues considered to be illiquid or restricted--See Note 6 of Notes to Financial Statements. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 14 OPPENHEIMER MAIN STREET SMALL CAP FUND/VA - -------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES Unaudited - --------------------------------------------------------------------------------
June 30, 2002 =========================================================================================================================== ASSETS Investments, at value (cost $21,459,681)-- see accompanying statement $23,870,145 - --------------------------------------------------------------------------------------------------------------------------- Cash 599,960 - --------------------------------------------------------------------------------------------------------------------------- Receivables and other assets: Investments sold 1,365,343 Shares of beneficial interest sold 68,671 Interest and dividends 10,777 Other 750 ------------ Total assets 25,915,646 =========================================================================================================================== LIABILITIES Payables and other liabilities: Investments purchased 761,931 Shares of beneficial interest redeemed 285,102 Transfer and shareholder servicing agent fees 1,679 Distribution and service plan fees 693 Trustees' compensation 114 Other 3,620 ------------ Total liabilities 1,053,139 =========================================================================================================================== NET ASSETS $24,862,507 ============ =========================================================================================================================== COMPOSITION OF NET ASSETS Par value of shares of beneficial interest $ 2,241 - --------------------------------------------------------------------------------------------------------------------------- Additional paid-in capital 26,483,990 - --------------------------------------------------------------------------------------------------------------------------- Undistributed net investment income 14 - --------------------------------------------------------------------------------------------------------------------------- Accumulated net realized loss on investments and foreign currency transactions (4,034,203) - --------------------------------------------------------------------------------------------------------------------------- Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign currencies 2,410,465 ------------ NET ASSETS $24,862,507 ============ =========================================================================================================================== NET ASSET VALUE PER SHARE Non-Service shares: Net asset value, redemption price per share and offering price per share (based on net assets of $22,719,957 and 2,047,806 shares of beneficial interest outstanding) $11.09 - --------------------------------------------------------------------------------------------------------------------------- Service shares: Net asset value, redemption price per share and offering price per share (based on net assets of $2,142,550 and 193,136 shares of beneficial interest outstanding) $11.09
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 15 OPPENHEIMER MAIN STREET SMALL CAP FUND/VA - -------------------------------------------------------------------------------- STATEMENT OF OPERATIONS Unaudited - --------------------------------------------------------------------------------
For the Six Months Ended June 30, 2002 ========================================================================================= INVESTMENT INCOME Dividends (net of foreign withholding taxes of $146) $ 97,078 - ----------------------------------------------------------------------------------------- Interest 6,856 ---------- Total investment income 103,934 ========================================================================================= EXPENSES Management fees 81,799 - ----------------------------------------------------------------------------------------- Distribution and service plan fees-- Service shares 785 - ----------------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees 6,730 - ----------------------------------------------------------------------------------------- Legal, auditing and other professional fees 4,948 - ----------------------------------------------------------------------------------------- Custodian fees and expenses 3,463 - ----------------------------------------------------------------------------------------- Shareholder reports 2,529 - ----------------------------------------------------------------------------------------- Trustees' compensation 1,934 - ----------------------------------------------------------------------------------------- Other 1,555 ---------- Total expenses 103,743 Less reduction to custodian expenses (205) ---------- Net expenses 103,538 ========================================================================================= NET INVESTMENT INCOME 396 ========================================================================================= REALIZED AND UNREALIZED GAIN (LOSS) - ----------------------------------------------------------------------------------------- Net realized loss on: Investments (955,822) Foreign currency transactions (154) ---------- Net realized loss (955,976) - ----------------------------------------------------------------------------------------- Net change in unrealized appreciation on: Investments 877,895 Translation of assets and liabilities denominated in foreign currencies 21,770 ---------- Net change 899,665 ---------- Net realized and unrealized loss (56,311) ========================================================================================= NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (55,915) ==========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 16 OPPENHEIMER MAIN STREET SMALL CAP FUND/VA - -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED ENDED JUNE 30, 2002 DECEMBER 31, (UNAUDITED) 2001 ================================================================================================================= OPERATIONS Net investment income (loss) $ 396 $ (922) - ----------------------------------------------------------------------------------------------------------------- Net realized loss (955,976) (268,528) - ----------------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation 899,665 362,920 ---------------------------- Net increase (decrease) in net assets resulting from operations (55,915) 93,470 ================================================================================================================= BENEFICIAL INTEREST TRANSACTIONS Net increase in net assets resulting from beneficial interest transactions: Non-Service shares 4,241,976 3,821,166 Service shares 2,054,354 108,184 ================================================================================================================= NET ASSETS Total increase 6,240,415 4,022,820 - ----------------------------------------------------------------------------------------------------------------- Beginning of period 18,622,092 14,599,272 ---------------------------- End of period [including accumulated net investment income (loss) of $14 and $(382), respectively] $24,862,507 $18,622,092 ===========================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 17 OPPENHEIMER MAIN STREET SMALL CAP FUND/VA FINANCIAL HIGHLIGHTS
SIX MONTHS YEAR ENDED ENDED JUNE 30, 2002 DECEMBER 31, NON-SERVICE SHARES (UNAUDITED) 2001 2000 1999 1998(1) =========================================================================================================================== PER SHARE OPERATING DATA Net asset value, beginning of period $ 11.05 $ 11.09 $ 14.07 $ 9.60 $10.00 - --------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income (loss) --(2) --(2) (.03) (.02) (.02) Net realized and unrealized gain (loss) .04 (.04) (2.35) 4.49 (.38) ---------------------------------------------------------------- Total from investment operations .04 (.04) (2.38) 4.47 (.40) - --------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net realized gain -- -- (.60) -- -- - --------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 11.09 $ 11.05 $ 11.09 $14.07 $ 9.60 ================================================================ =========================================================================================================================== TOTAL RETURN, AT NET ASSET VALUE(3) 0.36% (0.36)% (18.34)% 46.56% (4.00)% =========================================================================================================================== RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in thousands) $22,720 $18,514 $14,599 $6,927 $994 - --------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $21,277 $15,307 $12,576 $2,738 $441 - --------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets:(4) Net investment income (loss) 0.00%(2) (0.01)% (0.29)% (0.37)% (0.79)% Expenses 0.94% 1.05% 1.37% 1.83% 0.87%(5) Expenses, net of reduction to custodian fees N/A N/A 1.35% 1.34% N/A - --------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 67% 213% 162% 176% 61% 1. For the period from May 1, 1998 (inception of offering) to December 31, 1998. 2. Less than $0.005 per share. 3. Assumes an investment on the business day before the first day of the fiscal period (or inception of offering), with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Total returns are not annualized for periods less than one full year. Total return information does not reflect expenses that apply at the separate account level or to related insurance products. Inclusion of these charges would reduce the total return figures for all periods shown. 4. Annualized for periods of less than one full year. 5. Expense ratio has been calculated without adjustment for the reduction to custodian expenses.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 18 OPPENHEIMER MAIN STREET SMALL CAP FUND/VA SIX MONTHS PERIOD ENDED ENDED JUNE 30, 2002 DECEMBER 31, SERVICE SHARES (UNAUDITED) 2001(1) ============================================================================== PER SHARE OPERATING DATA Net asset value, beginning of period $11.05 $10.61 - ------------------------------------------------------------------------------ Income from investment operations: Net investment income .01 --(2) Net realized and unrealized gain .03 .44 ------------------------- Total from investment operations .04 .44 - ------------------------------------------------------------------------------ Dividends and/or distributions to shareholders: Dividends from net realized gain -- -- - ------------------------------------------------------------------------------ Net asset value, end of period $11.09 $11.05 ========================= ============================================================================== TOTAL RETURN, AT NET ASSET VALUE(3) 0.36% 4.15% ============================================================================== RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in thousands) $2,143 $108 - ------------------------------------------------------------------------------ Average net assets (in thousands) $ 752 $ 26 - ------------------------------------------------------------------------------ Ratios to average net assets:(4) Net investment gain (loss) 0.20% (0.34)% Expenses 1.15% 1.19% - ------------------------------------------------------------------------------ Portfolio turnover rate 67% 213% 1. For the period from July 16, 2001 (inception of offering) to December 31, 2001. 2. Less than $0.005 per share. 3. Assumes an investment on the business day before the first day of the fiscal period (or inception of offering), with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Total returns are not annualized for periods less than one full year. Total return information does not reflect expenses that apply at the separate account level or to related insurance products. Inclusion of these charges would reduce the total return figures for all periods shown. 4. Annualized for periods of less than one full year. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 19 OPPENHEIMER MAIN STREET SMALL CAP FUND/VA - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS Unaudited - -------------------------------------------------------------------------------- ================================================================================ 1. SIGNIFICANT ACCOUNTING POLICIES Oppenheimer Main Street Small Cap Fund/VA (the Fund) is a separate series of Oppenheimer Variable Account Funds (the Trust), which operated under the name of Oppenheimer Small Cap Growth Fund/VA through April 30, 2001, an open-end management investment company registered under the Investment Company Act of 1940, as amended. The Fund's investment objective is to seek capital appreciation. The Trust's investment advisor is OppenheimerFunds, Inc. (the Manager). The Fund offers two classes of shares. Both classes are sold at their offering price, which is the net asset value per share, to separate investment accounts of participating insurance companies as an underlying investment for variable life insurance policies, variable annuity contracts or other investment products. The class of shares designated as Service shares is subject to a distribution and service plan. All classes of shares have identical rights and voting privileges. Earnings, net assets and net asset value per share may differ by minor amounts due to each class having its own expenses directly attributable to that class. The following is a summary of significant accounting policies consistently followed by the Fund. - -------------------------------------------------------------------------------- SECURITIES VALUATION. Securities listed or traded on National Stock Exchanges or other domestic or foreign exchanges are valued based on the last sale price of the security traded on that exchange prior to the time when the Fund's assets are valued. In the absence of a sale, the security is valued at the last sale price on the prior trading day, if it is within the spread of the closing bid and asked prices, and if not, at the closing bid price. Securities (including restricted securities) for which quotations are not readily available are valued primarily using dealer-supplied valuations, a portfolio pricing service authorized by the Board of Trustees, or at their fair value. Fair value is determined in good faith under consistently applied procedures under the supervision of the Board of Trustees. Short-term "money market type" debt securities with remaining maturities of sixty days or less are valued at amortized cost (which approximates market value). - -------------------------------------------------------------------------------- FOREIGN CURRENCY TRANSLATION. The accounting records of the Fund are maintained in U.S. dollars. Prices of securities denominated in foreign currencies are translated into U.S. dollars at the closing rates of exchange. Amounts related to the purchase and sale of foreign securities and investment income are translated at the rates of exchange prevailing on the respective dates of such transactions. The effect of changes in foreign currency exchange rates on investments is separately identified from the fluctuations arising from changes in market values of securities held and reported with all other foreign currency gains and losses in the Fund's Statement of Operations. - -------------------------------------------------------------------------------- JOINT REPURCHASE AGREEMENTS. The Fund, along with other affiliated entities managed by OFI, may transfer uninvested cash balances into one or more joint repurchase agreement accounts. These balances are invested in one or more repurchase agreements, secured by U.S. government securities. Securities pledged as collateral for repurchase agreements are held by a custodian bank until the agreements mature. Each agreement requires that the market value of the collateral be sufficient to cover payments of interest and principal; however, in the event of default by the other party to the agreement, retention of the collateral may be subject to legal proceedings. 20 OPPENHEIMER MAIN STREET SMALL CAP FUND/VA - -------------------------------------------------------------------------------- ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than those attributable to a specific class), gains and losses are allocated daily to each class of shares based upon the relative proportion of net assets represented by such class. Operating expenses directly attributable to a specific class are charged against the operations of that class. - -------------------------------------------------------------------------------- FEDERAL TAXES. The Fund intends to continue to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income, including any net realized gain on investments not offset by capital loss carryforwards, if any, to shareholders. As of June 30, 2002, the Fund had available for federal income tax purposes an estimated unused capital loss carryforward of $4,034,202. This estimated capital loss carryforward represents carryforward as of the end of the last fiscal year, increased for losses deferred under tax accounting rules to the current fiscal year and increased or decreased by capital losses or gains realized in the first six months of the current fiscal year. As of December 31, 2001, the Fund had available for federal income tax purposes unused capital loss carryforwards as follows: EXPIRING -------------------------------- 2008 $1,795,693 2009 1,282,533 ---------- Total $3,078,226 ========== - -------------------------------------------------------------------------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date. - -------------------------------------------------------------------------------- CLASSIFICATION OF DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Net investment income (loss) and net realized gain (loss) may differ for financial statement and tax purposes. The character of dividends and distributions made during the fiscal year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. Also, due to timing of dividends and distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which the income or net realized gain was recorded by the Fund. - -------------------------------------------------------------------------------- INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon ex-dividend notification in the case of certain foreign dividends where the ex-dividend date may have passed. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income, which includes accretion of discount and amortization of premium, is accrued as earned. - -------------------------------------------------------------------------------- SECURITY TRANSACTIONS. Security transactions are recorded on the trade date. Realized gains and losses on securities sold are determined on the basis of identified cost. - -------------------------------------------------------------------------------- OTHER. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. 21 OPPENHEIMER MAIN STREET SMALL CAP FUND/VA - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- ================================================================================ 2. SHARES OF BENEFICIAL INTEREST The Fund has authorized an unlimited number of $0.001 par value shares of beneficial interest. Transactions in shares of beneficial interest were as follows:
SIX MONTHS ENDED JUNE 30, 2002 YEAR ENDED DECEMBER 31, 2001(1) SHARES AMOUNT SHARES AMOUNT - --------------------------------------------------------------------------------------------------------------------------- NON-SERVICE SHARES Sold 726,768 $ 8,143,303 869,437 $ 8,938,580 Dividends and/or distributions reinvested -- -- -- -- Redeemed (355,090) (3,901,327) (509,595) (5,117,414) -------------------------------------------------------------- Net increase 371,678 $ 4,241,976 359,842 $ 3,821,166 ============================================================== - --------------------------------------------------------------------------------------------------------------------------- SERVICE SHARES Sold 188,056 $ 2,105,361 10,574 $ 116,404 Dividends and/or distributions reinvested -- -- -- -- Redeemed (4,708) (51,007) (786) (8,220) -------------------------------------------------------------- Net increase 183,348 $ 2,054,354 9,788 $ 108,184 ==============================================================
1. For the year ended December 31, 2001, for Non-Service shares and for the period from July 16, 2001 (inception of offering) to December 31, 2001, for Service shares. ================================================================================ 3. PURCHASES AND SALES OF SECURITIES The aggregate cost of purchases and proceeds from sales of securities, other than short-term obligations, for the six months ended June 30, 2002, were $18,998,137 and $14,090,090, respectively. ================================================================================ 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the investment advisory agreement with the Trust which provides for a fee of 0.75% of the first $200 million of average annual net assets, 0.72% of the next $200 million, 0.69% of the next $200 million, 0.66% of the next $200 million and 0.60% of average annual net assets over $800 million. The Fund's management fee for the six months ended June 30, 2002 was an annualized rate of 0.75%. - -------------------------------------------------------------------------------- TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager, acts as the transfer and shareholder servicing agent for the Fund. The Fund pays OFS a $19.75 per account fee. Additionally, funds offered in variable annuity separate accounts are subject to minimum fees of $5,000 for assets of less than $10 million and $10,000 for assets of $10 million or more. The Fund is subject to the minimum fee in the event that the per account fee does not equal or exceed the applicable minimum fee. OFS has voluntarily agreed to limit transfer and shareholder servicing agent fees up to an annual rate of 0.25% of average net assets of the fund. This undertaking may be amended or withdrawn at any time. - -------------------------------------------------------------------------------- DISTRIBUTION AND SERVICE PLAN FOR SERVICE SHARES. The Fund has adopted a Distribution and Service Plan for Service shares to pay OppenheimerFunds Distributor, Inc., the Distributor, for distribution-related services for the Fund's Service shares. Under the Plan, payments are made quarterly at an annual rate of up to 0.25% of the average annual net assets of the Service shares of the Fund. 22 OPPENHEIMER MAIN STREET SMALL CAP FUND/VA ================================================================================ 5. FOREIGN CURRENCY CONTRACTS A foreign currency contract is a commitment to purchase or sell a foreign currency at a future date, at a negotiated rate. The Fund may enter into foreign currency contracts for operational purposes and to seek to protect against adverse exchange rate fluctuations. Risks to the Fund include the potential inability of the counterparty to meet the terms of the contract. The net U.S. dollar value of foreign currency underlying all contractual commitments held by the Fund and the resulting unrealized appreciation or depreciation are determined using foreign currency exchange rates as provided by a reliable bank, dealer or pricing service. Unrealized appreciation and depreciation on foreign currency contracts are reported in the Statement of Assets and Liabilities as a receivable or payable and in the Statement of Operations with the change in unrealized appreciation or depreciation. The Fund may realize a gain or loss upon the closing or settlement of the foreign currency transactions. Such realized gains and losses are reported with all other foreign currency gains and losses in the Statement of Operations. ================================================================================ 6. ILLIQUID OR RESTRICTED SECURITIES As of June 30, 2002, investments in securities included issues that are illiquid or restricted. Restricted securities are often purchased in private placement transactions, are not registered under the Securities Act of 1933, may have contractual restrictions on resale, and are valued under methods approved by the Board of Trustees as reflecting fair value. A security may also be considered illiquid if it lacks a readily available market or if its valuation has not changed for a certain period of time. The Fund intends to invest no more than 15% of its net assets (determined at the time of purchase and reviewed periodically) in illiquid or restricted securities. Certain restricted securities, eligible for resale to qualified institutional investors, are not subject to that limitation. The aggregate value of illiquid or restricted securities subject to this limitation as of June 30, 2002 was $47,853, which represents 0.08% of the Fund's net assets, all of which is considered restricted. Information concerning restricted securities is as follows:
ACQUISITION VALUATION AS OF UNREALIZED SECURITY DATE COST JUNE 30, 2002 DEPRECIATION - ---------------------------------------------------------------------------------------------------------------------- STOCKS AND/OR WARRANTS Canadian 88 Energy Corp. 6/4/02 $29,680 $28,938 $742
23 OPPENHEIMER MAIN STREET SMALL CAP FUND/VA - -------------------------------------------------------------------------------- OPPENHEIMER MAIN STREET SMALL CAP FUND/VA - -------------------------------------------------------------------------------- A SERIES OF OPPENHEIMER VARIABLE ACCOUNT FUNDS ================================================================================ TRUSTEES AND OFFICERS James C. Swain, Trustee, CEO and Chairman of the Board John V. Murphy, President and Trustee William L. Armstrong, Trustee Robert G. Avis, Trustee George C. Bowen, Trustee Edward L. Cameron, Trustee Jon S. Fossel, Trustee Sam Freedman, Trustee Beverly L. Hamilton, Trustee Robert J. Malone, Trustee F. William Marshall, Jr., Trustee Charles Albers, Vice President Mark Zavanelli, Vice President Robert G. Zack, Vice President and Secretary Brian W. Wixted, Treasurer Katherine P. Feld, Assistant Secretary Kathleen T. Ives, Assistant Secretary Denis R. Molleur, Assistant Secretary ================================================================================ INVESTMENT ADVISOR OppenheimerFunds, Inc. ================================================================================ DISTRIBUTOR OppenheimerFunds Distributor, Inc. ================================================================================ TRANSFER AGENT OppenheimerFunds Services ================================================================================ INDEPENDENT AUDITORS Deloitte & Touche LLP ================================================================================ LEGAL COUNSEL Myer, Swanson, Adams & Wolf, P.C. The financial statements included herein have been taken from the records of the Fund without examination of those records by the independent auditors. For more complete information about Oppenheimer Main Street Small Cap Fund/VA, please refer to the Prospectus. To obtain a copy or for more information on how to obtain a separate account prospectus, call OppenheimerFunds, Inc. at 1.800.981.2871. [LOGO OMITTED] OPPENHEIMER FUNDS [REGISTRATION MARK] Distributor, Inc. [COPYRIGHT]Copyright 2002 OppenheimerFunds, Inc. All rights reserved. -----END PRIVACY-ENHANCED MESSAGE-----